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Why Do Prices Going Up Mean Prices Won't Go Down?

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I seem to hear this constantly on here, from EAs, from most people.

They say houses are selling x% over the asking prices, they have risen x% since last year. There is a big shortage, etc. etc..

For this reason there will be no crash because Mr John Doe from the Dependant News Paper said the crash would occur on the 2nd May 2005 at 3:47pm. He was wrong so it won't happen.

Before the Dot com Bubble burst, what was happening to Dot Com share prices? They were going up. What was the predicition for their prices? It was that they would go up.

Just before other major crashes, what was happening to prices - For example Stock market prices? They were going up. They were also predicited to go up. (okay, this may not have been the same for every crash).

When the last House price crash happened I was about 16, my parents had just sold their house in Essex (A 5 bed Detached home in Wickham Bishops) for over £170,000. Within a few months the house re-sold for £120,000.

Maybe the market will slow down (I personally think it has), perhaps it will drop slowly to a more reasonable level, perhaps it will stagnate for the next 40 years or we will start to earn lots more money. Or maybe everyone will panic and prices will drop like a stone. Just remember, for every pound that someone has gained on house prices rises, someone else has lost. For every seller, there has to be a buyer.

I may be talking absolute rubbish, I may get shot down in flames, this is just my opinion. Perhaps an uneducated one, but an opinion all the same.

Edited by Adrian Allen

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I don`t think you`re talking rubbish. "for every pound that someone has gained on house prices rises, someone else has lost", that just about sums it up. When you look at what has happened in the recent house price boom, where has all of this "money" come from ? No doubt, some of it has come from hard work and improved economic conditions, but a lot of it seems to be "candy floss" in my opinion. A strong gust of wind, and the "candy floss" will be blown away. Bring on the gales.

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  • 301 Brexit, House prices and Summer 2020

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      • down 5% +
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